Accelerating digital workforce transformation in financial services

Updated: Sep 2

Originally published in Finextra | 18 May 2021


Financial services continues its digitally-led evolution, with an emphasis now on data scientists, business analysts and “digital storytellers'' - individuals and teams that can use the increasing number of data outputs from a digitally transformed sector to engage with real people in the real world in real-time.


The explosion in fintech is a good example of this, as observed by Ernst & Young who state that the uptake of fintech services grew to 64% in 2019 compared with16% in 2015. This trend continued in 2020, with adjust reporting that investment apps experienced 88% growth in usage from January to November. It also found that payment app sessions increased 49% globally.


Data literacy holding back the banking sector

However, as noted in a recent Gartner report, many companies in the financial services industry still struggle with key areas such as data literacy, advanced analytics and more. As a result, they have teams that are not yet taking full advantage of this change. Many businesses are struggling to assemble the kind of team that can apply and exploit these disruptive technologies for maximum business benefit.


Compounding the situation, the ongoing pandemic has drastically altered consumer behaviour. As recognised by KPMG, it has transformed interactions as consumers increasingly look for certainty where they can find it, as well as creating a greater reliance on digital channels.


The time for unprecedented measures

Think back to a year ago, when Chancellor Rishi Sunak declared that “an unprecedented crisis calls for unprecedented measures.” Who would have imagined most of the UK would still be working from home, grounded from travelling abroad and counting the immense fallout from the pandemic? Certainly not the legacy banks, which, according to predictions from McKinsey, could potentially find their revenue losses totalling $3.7 trillion to $4.7 trillion between 2020 and 2024 from COVID, compared to the rapid growth of their fintech counterparts.


Investing in your people

Adding all this to the ongoing challenges of funding and complexity, many in this sector find themselves in an uncomfortable situation. In response, CIOs and their teams must turn inward to their greatest resource; people. In an increasingly digital world, success depends on the workforce upskilling and developing both hard (technical) and softer (communication and presentation) skills. In order to survive, financial services companies need to connect the dots between digital initiatives, strategy, and business enablement; building the right skills for their organisations to compete both now and in the future.


Upskilling workforce capabilities around digital technology gives them new skill sets which, when combined with the right product and service innovations, can help banks, asset managers and insurance companies to leverage disruptive technology across a number of different areas. From automation, where RPA and AI automate core processes and workflows to investing in programming tools which provide forward-looking insights on emerging risks and opportunities for value creation. Each of these technology-led opportunities presents a challenge for the financial sector to upskill their workforce.


Adopting an agile mindset to tackle realtime business challenges.

Upskilling means replacing traditional top down ‘command and control’ thinking and organisational silos with an agile mindset which whilst encouraging a bottom-up view of engagement and communication, where all staff are empowered to get involved in shaping the bank’s digital transformation. The democratisation of information must be a governing principle, supported by senior management.


The most valuable learning experiences tackle real-world business challenges. Advances in Education Technology allows employees working remotely to participate virtually with in-office co-workers in skills development programmes. This means the teams located in the office or at home, in markets globally, can learn together.


Klarna, Europe’s largest fintech by market value, is committed to investing in its teams’ skills. Says Randy Heyrowsky of Klarna’s Organisation Development team: “This results in a coalition of self-driven, self-motivated people, inspired by clear communication of the business vision from senior managers to rally the troops”. Likewise, HSBC, with a network of 7,500 offices in 80 countries, is committed to cross-departmental staff training programmes which reflect its digital ambitions to drive true cross-functional change. They have both realised that limiting staff training to individual projects or teams limits the potential of digital transformation success for the bank.


Reaping the internal benefits

IT teams often have several agendas to balance and as a result, CIOs and managers may believe upskilling current developers is more time-consuming and costly than hiring new ones. However, many companies within financial services can save time and money by developing current employees instead of hiring new ones. It can take 8-12 weeks to replace a knowledge worker, and up to 6 months before the replacement is fully productive.


Ready for promotion and retaining top talent

Investing in digital skills can also help prepare employees who are stepping up to more senior roles and taking on more responsibility by helping them learn the skills that are required to function effectively in their new positions., As noted by PWC, upskilling offers a chance to fine tune existing work methods, systems and protocols that can help teams work smarter and increase productivity.


Providing learning opportunities is a great way to retain top talent, especially for younger team members who often consider learning a key aspect of their job. This makes upskilling more than a way to enhance workforce competencies. It also convinces workers to stay at your bank longer, reducing the time and money spent on recruitment; estimated by some to be as high as six to nine months’ salary on average. Upskilling shows employees they are valued and the company is invested in them, making them not just better workers but more productive members of the organisation. This will improve their morale as well as their workplace capabilities.


Changing customer expectations, cut-throat competition, increasing regulatory complexity and pressure to streamline operations are driving the push for reinvention and innovation in the financial services market. Challenger banks and fintechs have digital transformation in their DNA, yet many incumbent banks must now play catch up.

As a result, upskilling is no longer a luxury but a necessity. All stakeholders, including employers themselves, need to recognise a future that requires new skills and job profiles defined by digital transformation. Developing digital skills must be considered a top priority for all financial services businesses to thrive in the digital age.

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